GBP/USD Steady, Sterling Gains on EUR, JPY

GBP value, information and evaluation:

  • GBP/USD is holding its floor regardless of a powerful US Greenback, helped by information that the UK financial system is increasing quickly and expectations of a UK charge enhance.
  • This implies persevering with losses for EUR/GBP and positive factors for GBP/JPY, with the most recent UK GDP figures backing up the expansion narrative.

GBP outlook brilliant on financial growth hopes

GBP is holding its floor in opposition to a powerful US Greenback as the most recent UK GDP information reinforce the image of a buoyant UK financial system.

The figures present GDP progress 12 months/12 months up 6.9% in August, down from July’s 8.8% however above the 6.7% predicted. Which means the UK financial system is now inside 0.8% of its pre-pandemic dimension and reinforces expectations that the Financial institution of England will enhance its benchmark Financial institution Charge to 0.25% from 0.10% by the top of this 12 months.

UK GDP data.

Supply: DailyFX calendar

The statistics have been launched only a day after the Worldwide Financial Fund forecast that the UK would obtain the quickest growth of any nation within the G7 group of developed international locations this 12 months. The IMF additionally warned of excessive inflation, basically backing the necessity for a charge rise.

This has all helped GBP maintain tempo with a agency USD that has been boosted by excessive vitality costs, inflation fears and the prospect that the US will probably announce a tapering of its asset purchases subsequent month. The probabilities of a US charge enhance by July subsequent 12 months are actually 50/50 judging by market pricing.

GBP/USD Worth Chart, Two-Hour Timeframe (September 30 – October 13, 2021)

Latest GBP/USD price chart.

Supply: IG (You’ll be able to click on on it for a bigger picture)

Sterling’s steadiness in opposition to the USD means it has gained in opposition to currencies just like the Euro and the Japanese Yen, with EUR/GBP falling and GBP/JPY rising. Trying forward, these developments look set to proceed, though GBP/JPY is now in overbought territory judging by the 14-day RSI.

GBP/JPY Worth Chart, Each day Timeframe (Might 19 – October 13, 2021)

Latest GBP/JPY price chart.

Supply: IG (You’ll be able to click on on it for a bigger picture)

— Written by Martin Essex, Analyst

Be at liberty to contact me on Twitter @MartinSEssex


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